Weighted average stock ledger

What the weighted average stock ledger does

To know your profit you need the cost of the goods you sold. This ledger records every purchase and sale, calculates the weighted average cost of each item as stock arrives, shows the quantity and value on hand and works out the cost of each sale, so your cost of sales and closing stock are always up to date.

Who it is for

Shops, wholesalers and small manufacturers who hold stock, and accountants who need a clear stock valuation for the accounts and the tax return.

How to use the workbook

1. List the items you stock in the dropdown on the Ledger sheet.
2. Record each purchase with its quantity and the unit cost paid.
3. Record each sale with its quantity; the cost is taken from the average cost.
4. Read the stock on hand, the stock value and the cost of sales.
5. Save a copy under a new name for each month or year, so earlier records stay as they were.

What is inside

• Weighted average cost updated with every purchase
• Stock on hand for each item after each entry
• Value of stock on hand
• Cost of each sale and total cost of sales
• Summary of cost of sales by item

The workbook has these sheets: Instructions, Ledger, By item. The main table has the columns Date; Item; Movement; Quantity; Unit cost (purchases); Purchase qty; Sales qty; Purchase value. Yellow cells are for you to fill in and grey cells calculate by themselves, so leave the grey cells alone. The example rows show how it works; type over them with your own entries.

Tips for getting it right

• Enter movements in date order so the running figures are right.
• Count the stock regularly and correct differences with an adjustment entry.
• Use the same units for purchases and sales, such as kilograms or pieces.
• Keep supplier invoices with the ledger to support the unit costs.

Why keep this record

Accounting records let you answer three questions at any time: what came in, what went out and who owes whom. Kept consistently they also make tax returns, loan applications and the sale of a business much easier, because the evidence is already organised. Entering transactions the day they happen is far cheaper than reconstructing them at year end.

Questions people ask

Do I need to know Excel formulas? No. Type into the yellow cells and the rest is worked out for you. The formulas are visible if you want to see how a figure is reached.

Can I add rows or change the layout? You can add your own columns to the right and your own notes. If you insert rows inside a table, copy the grey formula cells down so the new rows calculate too.

Will it work on my phone or in Google Sheets? Yes for viewing and typing, but dropdown lists and the charts look best in desktop Excel or LibreOffice.

Keeping it safe and up to date

Good accounting records are a legal duty as well as a management tool: keep the supporting receipts and invoices with the workbook, and keep each year's copy for at least five years. Work on a copy, never on your only file, and back it up.

Read how to keep business records for KRA for the wider picture. Free calculators that go with it: Vat return calculator. See more accounting templates or ask us for a custom one.

The workbook works in Microsoft Excel, LibreOffice and Google Sheets. It is a tool to help you work out and record figures, not tax, legal or accounting advice, and it is not affiliated with the Kenya Revenue Authority. If something does not work as described, contact us and we will put it right.

Related guides, calculators and templates

• Free calculator: VAT Return Calculator
• Guide: VAT invoices and quotations in Kenya: what to include and common mistakes
• Guide: How to use M-Pesa statements to prove income and expenses
• Guide: Bookkeeping for small businesses in Kenya: how to get started
• Another template: Cash flow statement (direct method)
• Another template: Supplier statement reconciliation
• Another template: Balance sheet template

Need something different? Request a custom template, browse all guides or see every Excel template.